July 2025 Employment Law Changes in Europe: What Businesses Everywhere Need to Know

The landscape for independent contractors in Europe is evolving rapidly. This July, several important legal changes are taking effect that will reshape how businesses engage with contractors.

For global organizations, especially those managing workforces in other countries, understanding these European employment law changes is essential to reduce compliance risk and protect your business. Here's a breakdown of the most significant developments happening in July 2025 and beyond.

EU Platform Work Directive: Contractor misclassification crackdown

The EU Platform Work Directive, fully implemented across member states as of July 2025, represents a significant step toward combating worker misclassification in the platform economy.

Key updates for global employers

• Presumption of employment: Platform workers (defined as individuals who use online platforms to find work and provide services in exchange for payment) may be considered employees, not independent contractors, if the platform controls key aspects such as pay, fixed work schedules, or performance evaluation.

• Burden of proof on companies: Businesses must demonstrate that contractors operate with true independence to avoid employee obligations.

• Algorithmic transparency: Platforms must disclose how automated systems affect work assignments, evaluations, and other critical decisions.

• Mandatory human oversight: Platforms cannot rely solely on automated decisions like account suspensions.

Action for employers

Review your platform-based workforce to ensure compliance ahead of national implementation deadlines (by December 2, 2026). Explore Safeguard Global’s Contractor Management solution to learn more about your compliance risk. Or, evaluate this risk on your own using Safeguard’s Worker Classification Tool to see if you might need some help.

Netherlands: New contractor classification law

The Netherlands has introduced the VBAR Law (Wet Verduidelijking Beoordeling Arbeidsrelaties en Rechtsvermoeden), creating stricter contractor classification rules.

What businesses need to know

• Contractors earning below €32.24 EUR per hour are presumed employees.
• To maintain independent contractor status, individuals must demonstrate 1) multiple clients 2) autonomy over work methods 3) entrepreneurial risk
• Noncompliance risks include financial penalties and retroactive employee benefits.

Action for employers

Audit your contractor agreements in the Netherlands to ensure alignment with the new legal framework. Learn more about managing compliance with Safeguard Global’s Employer of Record services in the Netherlands.

Germany: Enhanced contractor and employee protections

Germany has implemented several measures to strengthen protections for contractors, impacting both employees and contractors.

What businesses need to know

• The minimum wage is now set at €12.82 EUR per hour.
• Essential employment terms can now be delivered electronically.
• Digital parental leave applications are available via email, simplifying processes for workers.

Action for employers

Ensure minimum wage compliance for contractors and review contract delivery processes. Learn more about managing payroll with Safeguard Global’s Employer of Record services in Germany.

United Kingdom: Contractor employment law reforms delayed

Proposed UK employment law reforms, including significant changes for contractors, have been delayed until at least autumn 2025.

Proposed reforms include:

• Ban on zero-hour contracts (employment contracts that do not require the employer to provide a minimum number of working hours to the employee)
• Restrictions on "fire and rehire" practices
• Day-one protection from unfair dismissal

Action for employers

While these changes are pending, businesses and contractors should stay informed on the progress of the legislation. As these changes begin to take effect, let Safeguard Global stay ahead of evolving UK workforce laws for you when you leverage our Employer of Record services in the United Kingdom.

Italy: No immediate changes for contractors

In June 2025, Italy held referendums aimed at repealing certain labor laws, including provisions related to contractor protections. However, none of the referendums reached the required voter turnout threshold, rendering the results invalid. As a result, existing labor laws, including those affecting contractors, remain unchanged.

See more information about Safeguard Global’s Employer of Record services in Italy.

Next steps

Take the following steps to ensure your business is fully compliant with local laws and regulations.

• Review contracts: Ensure that contractor agreements accurately reflect the nature of the working relationship and comply with new legal standards.
• Assess employment status: Evaluate whether contractors meet the criteria for independent status under the new laws, particularly concerning autonomy and economic dependence.
• Stay informed: Monitor ongoing legislative developments to anticipate and prepare for upcoming changes.

The direction is clear: European lawmakers are cracking down on contractor misclassification and introducing stricter employment protections. For global organizations, ensuring workforce compliance is imperative so your organization does not face unnecessary fines or legal penalties.

For more information on these laws or to learn more about how we can help, reach out to Safeguard Global.